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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Variance analysis
A company uses a standard absorption costing system. The following figures are available for the last
accounting period in which actual profit was $108,000.
$
Sales volume profit variance 6,000 adverse
Sales price variance 5,000 favourable
Total variable cost variance 7,000 adverse
Fixed cost expenditure variance 3,000 favourable
Fixed cost volume variance 2,000 adverse
What was the standard profit for actual sales in the last accounting period?
I wonder why in this case “Sales volume profit variance” is irrelevant?
thanks in advance
Because the question asks for the standard profit for the actual sales.
The sales volume variance is the difference between the budgeted profit and the standard profit for the actual sales.
thanks
You are welcome.
